United States: Inflation reaches five-year high in February
March 15, 2017
Consumer prices, adjusted for seasonal factors, increased 0.1% from the previous month, marking a notable deceleration from the 0.6% rise observed in January and matching market expectations. February’s result was the smallest monthly increase since July 2016 and stemmed mainly from lower gasoline prices, which more than offset price increases for food and rental accommodation.
Inflation accelerated further from 2.5% in January to 2.7% in February, hitting the highest level since February 2012. The increase caused annual average inflation to inch up to 1.5% in February from January’s 1.4%.
Core consumer prices, which exclude food and energy prices, increased 0.2% from the previous month in February, which came in slightly below the 0.2% rise observed in January. Core inflation was steady in February at January’s 2.2%.
Although the Federal Reserve targets an alternative measure of inflation called the personal consumption expenditures price index (PCEPI), it also follows the core inflation measure closely to judge whether inflationary pressures are increasing in the economy.
Author: David Ampudia, Economist